Although the Little Colorado River Medical Center had difficulties last year that has the Winslow rumor mill whispering closure and bankruptcy, there is no chance of closure or loss of service according to Little Colorado River Medical Center (LCRMC) CEO Jack Dempsey.
“A year ago, LCRMC faced meaningful financial challenges arising from the payor mix of the communities served. Both Medicare and Access have had significant reimbursement reductions,” explained Dempsey. “Northeastern Arizona communities have high proportions of Medicare and Access reimbursement. In addition to that, there were operational difficulties, including the installation of an electronic healthcare system,” revealed the CEO. Electronic healthcare systems for electronic health records were required by the 2009 American Recovery and Reinvestment Act Pathway for Meaningful Use.
“Little Colorado River Medical Center had a difficult year last year, with significant financial losses that concerned the Board. They reached out to NAH,” said Dempsey. Northern Arizona Healthcare (NAH) is a not-for-profit healthcare system that provides services through Flagstaff Medical Center, Verde Valley Medical Center with campuses in Cottonwood and Sedona, and other entities. NAH and the Winslow Memorial Hospital (now LCRMC) had a 10-year affiliation agreement that ended two years ago. Last year, the problems prompted the LCRMC Board to contact NAH to discuss entering into a new partnership agreement. An agreement was struck similar to NAH’s affiliation with Prescott’s Yavapai Regional Medical Center. Dempsey, who also serves as NAH vice president, legal and compliance, was offered the interim CEO position when there was a management change in April 2014. The interim label was removed in October 2014.
The recent affiliation agreement benefits LCRMC in that NAH pays a portion of Dempsey’s salary and also allows LCRMC to provide services such as electronic healthcare system support, licensure renewal assistance, financial expertise and strategic planning on an ala carte basis at cost with no mark-up and in some cases, at no charge. The collaboration benefits NAH in that it meets its commitment to a continuum of care for the people and families of Northern Arizona that includes integrated information systems.
“In regards to the continuum of healthcare, LCRMC is a good partner for NAH in serving northeastern Arizona and the reservation communities,” Dempsey said. Some 30-35 percent of those served by NAH are Native American, while more than 70 percent of LCRMC patients are Native American. LCRMC is a 25-bed critical access hospital that is community-owned and operated as a not-for-profit organization.
“The Board has implemented a number of initiatives with operational changes which will lead to a more stable 2015,” Dempsey stated. “To date, NAH has provided no financial support to LCRMC. The increase in financial stability this fiscal year arises solely from the good work of the LCRMC clinical and administrative teams. This is not an NAH bail out of LCRMC,” emphasized Dempsey.
“LCRMC is not considering a bankruptcy resulting in closure or liquidation – no such proceeding is even being considered. The Board is, however, in its fiduciary capacity, considering and implementing a number of measures to restore stability to LCRMC and allow it to serve the Winslow community for generations to come,” said the CEO, who is also a licensed Arizona attorney.
“Among options considered is a reorganization proceeding, which would only be implemented to strengthen LCRMC and its mission to continue community service. Such a proceeding is customarily called a Chapter 11 reorganization. Although the Board has spoken to legal counsel, it has approved no such course of action. Such a proceeding would be initiated if reasonably necessary to allow LCRMC to continue its tradition of care,” he said.
“No measure has been taken to date (or as contemplated in reorganization) is thought to result in layoffs, other than would be customary in any organization working towards sound management,” said Dempsey. FBN
Little Colorado River Medical Center
1501 N Williamson Ave, Winslow
Northern Arizona Healthcare
1200 N Beaver St, Flagstaff
By Stacey Wittig
Flagstaff Business News